Tesla is in the process of developing a brand new engine for their new WhiteStar sedan and it seems that they are having a hard time with it. Elon Musk â€“ Chairman for Tesla â€“ stated during an interview with Fox Business News that the company has made a technology deal with the German supplier Daimler.

At this time there is no official comment from Tesla â€“ but it is possible that the deal is that Daimler will provide engines for the range extended WhiteStar. Daimler has always struggled to make money from Smart and the micro-car builder has a 1.0L three cylinder engine that might make a good range extender. If Daimler supplied 10,000 or so of those engines to Tesla, it could help drive down Daimler’s costs. The other possibility is that Tesla might be licensing battery management technology to Daimler, but that scenario seems less likely.